Netherlands may issue 30-year bonds

NETHERLANDS - The Dutch State Treasury Agency is to poll “reasonably big” investors in Europe, including institutions, to gauge their reaction to a new 30-year bond.

The consultation follows moves by France and the UK to issue 50-year bonds amid calls from pension funds for longer dated paper to help them meet their liabilities. Dutch pension schemes are seen as being particularly keen on such issues as new regulations begin to bite.

ABN Amro, Fortis Bank and Credit Suisse First Boston will conduct the research and if the upshot is positive, the bond could be issued as early as this month, the Amsterdam-based DSTA said.

“Their findings are expected in the next few weeks. In case the 30-year bond is preferred, the upcoming DDA direct_auction will be used to introduce a bond with a maturity slightly over 30 years,” it said. The next auction is on the agenda in the second half of March or April.

Erik Wilders, spokesman for the treasury, told IPE: “I have a feeling it will be the 30-year-bond” that is preferred.

If it were preferred, the introduction of the new bond would take place “a few months later”. A spokesman for the DSTA said precise timing of the DDA would depend on “market circumstances”.

“The Dutch State expects the borrowing requirement to be sufficiently high to issue such a long-term bond. Possible renewed issuance of 30-year bonds will be part of a strategy for long-duration issuance over the next few years, in order to ensure a transparent and consistent issuance policy” the DSTA said in a statement

The Dutch State will also include existing 30-year bonds, redeeming in 2023 and 2028, in this strategy.

The treasury estimates that its financing requirements on the capital market in 2005 will be €32-38bn, Wilders said.